ecra annual supplier and retailer convention
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ECRA Annual Supplier and
Retailer Convention
REPORT
ECRA is supported by the Australian Food and Grocery Council
23-24 October 2014
Crown Conference Centre
Melbourne
www.ecraustralasia.org.au
ECRA Convention 2014
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Efficient Consumer Response (ECR) is a business concept aimed at better satisfying
consumer needs, through businesses and trading partners working together.
In doing so, ECR best practices will deliver superior business results by reducing costs at all
stages throughout the value chain, achieving efficiency and streamlined processes.
ECR best practices can deliver improved range, consumer value, sales, service and
convenience offerings. This in turn will lead to greater satisfaction of consumer needs.
ECR Australasia reflects a commitment to take costs out of the grocery supply chain and
better satisfy consumer demands through the adoption of world’s best practice. In an
increasingly global food and grocery industry and a retail environment subject to rapid
change, the future for Australian and New Zealand suppliers, retailers and wholesalers
depends on increased efficiencies, reduced costs and added value for consumers.
For more information about ECR Australasia, visit www.ecraustralasia.org.au
Clive Stiff Unilever Australia & New Zealand
Graham Dugdale Simplot Australia Pty Ltd
Hamish McLeay The Wrigley Company
Matthew Foster Mars Petcare Australia
Grant Enders Coles
James Lane Coca Cola Amatil
Timothy Plummer Nestle Australia Ltd
Kathryn McLay Woolworths
It is with genuine pleasure that we are writing this note regarding the 2014 ECRA Retail and
Supplier Convention Report. The event in Melbourne, from 23 to 24 October, was an
enormous success, and we are sure that all of you who were fortunate enough to attend
will agree with us on this point.
With Australia and New Zealand’s leaders from retailer, supplier and manufacturing
organisations along with key industry stakeholders in attendance the event welcomed a
great array of world class speakers sharing their insights into “Connecting with the Consumer”.
The Convention provided a perfect opportunity to get inspired by real leaders, discuss the hot
topics of the day and to take advantage of the numerous networking opportunities.
Whether you were able to attend or not the Convention Report for 2014 provides a summary
of the essential key takeaways and provides insights into the passion to do well, that was
evident to all of those who attended.
The ECRA Board
Steve Green Progressive Enterprises Ltd
John Mullins Foodstuffs South Island Ltd
Adrian Cook Tasti Products Ltd
Tia Jordan Procter & Gamble Australia
Mike Butcher Heinz Watties NZ
Kelly Smith NZ Food & Grocery Council
Ken Bean Metcash
Robert Scoines Sanitarium Health & Wellbeing
Company
ECRA Board
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ECRA CONVENTION 2014
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Each year in October, the Efficient Consumer Response Australasia Retailer and Supplier
Convention brings together leaders from across the fast moving consumer goods industry to
examine, discuss and debate the current and emerging issues impacting our industry both
locally and globally.
Technological and digital revolutions are starting to transform, and in some cases even
disrupt, the value chain as we have known it. This is leading to an unprecedented pace of
innovation and change, impacting how, where and when we shop, how we engage with
shoppers and how consumers engage with our products, and the ways in which we work
with trading partners to develop responsive, agile and flexible supply chains to meet
shopper demands.
Globally and locally the FMCG Retail industry is entering a period of rapid expansion across
new channels to market and seeing a vast increase in data driven insight into shopper
behaviours and preferences. The ways in which shoppers interact with retailers and brands
will continue to change at an ever increasing pace.
The 2014 ECRA Supplier and Retailer Convention explored these themes and much more.
Convention delegates gained insight to the challenges and opportunities ahead, and to
real world strategies through interactive discussions and content rich sessions addressing the
critical industry issues. The Convention continues to be a must attend event for
decision-makers within FMCG industry organisations on an annual basis.
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Clive Stiff, Chairman & CEO, Unilever Australia & New Zealand
Chair of ECRA Board
Clive welcomed delegates to the convention and thanked ECRA’s generous
sponsors. Clive outlined the challenges facing the industry within a changing
landscape driven by the emergence of social media, mobile technology and
on-line shopping. He urged delegates to strongly consider “what will this mean
for our business?” Clive flagged the need for increased collaboration between
trading partners to truly work together to provide value to shoppers.
In describing challenges faced by the industry in the US and global context,
Jim noted that some things had not changed since the inception of ECR 20
years ago. Particularly in relation to the need to put the consumer at the
centre of decision making, and that value chain collaboration had never
been more important, albeit not an easy goal to achieve.
Jim highlighted key areas that were changing rapidly, the growth of
e-commerce driven by consumers’ thirst for knowledge and the ways in which
Jim Flannery
Senior Executive Vice President Operations & Industry Collaboration
Grocery Manufacturers Association (GMA)
The role of ECRA was highlighted as it continues to bring retailers and suppliers together to focus
on the consumer.
the new and emerging digital world impacts a consumer’s path to purchase. He provided
examples of how levels of transparency and consistency were still quite variable through the eyes of
the consumer.
Stephen Koukoulas
Managing Director
Market Economics Pty Ltd
Stephen examined the question “What’s in store for the Australian economy?”
with a review of current global trends and their impacts on the world with
which Australia trades. Topics broached included the slowdown in mining,
rising house prices, unemployment rates, and interest rates, and how these
impacted consumer confidence and spending.
Stephen pointed out that the Australian economy was seeking a move away from manufacturing
and towards the services sectors. Investment in the retail/wholesale sector has been soft in recent
years as businesses have been weathering the low growth period. Stephen predicted the big issues
for the short term to include house price moderation, the need to resolve the budget, China’s
slowdown, US monetary tightening and issues clouding the Eurozone, and the impact of these on the
Australian Dollar.
THU RSDAY 23 OCTOBER 2014
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John S . Phillips
Senior Vice President, Customer Supply Chain & Global Go-To-Market
PepsiCo Global Operations
John described the success generated though Apple’s focus on the consumer
experience first, followed by development of the technology to support this
goal. John noted that business used to be the first to engage in new
technologies but today it was the consumer who reacted first, with a ‘mind
blowing rate of change’ driven by the engagement with technology by
today’s youth who rely on technology as a key part of their life. John flagged
Apple, Google, Facebook and Amazon as key innovators in the social
technology sphere.
John then investigated trends most relevant to the FMCG industry and the impact of the divergence
of the digital and physical retail environments. He noted change driven by the use of smart devices,
hyper connectivity, and gamification built into marketing and sales functionality, and the degree of
personalisation possible to consumers today.
Finally, John discussed latest technological developments in areas including the use of wearable
technologies, robotics and home delivery utilising drones.
Phil Bonanno
Client Partner
Facebook Australia & New Zealand
Phil focussed on efficient and accountable marketing in retail, highlighting
three areas – the new reach and frequency, the new path to purchase, and
the new merchandising platform. In the first of these areas Phil advised
delegates that approximately 10 million Australians utilise Facebook each day
and this provides tremendous market insight in relation to demographic and
geographic user information.
Consumers’ new path to purchase includes the use of multiple devices, with Phil describing the retail
store as simply being ‘another device just like a mobile app or a website’. Phil talked about how to
tailor conversations with consumers on various mobile platforms and the need to make marketing
tools such as catalogues content relevant to specific shoppers as “one size fits no-one” in the new
digital world.
Jean-Yves Heude
Founder & Owner, ChessMate Consulting
Jean-Yves highlighted the tough business environment suppliers have faced in
recent years with increased trade spend not translating into sales growth and
a profit shift from supplier to retailer.
Jean-Yves noted that the market had moved from one of ‘win-win’ to a
‘balance of power’ model, the nature of the relationship now being one of
pure commercial negotiation.
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Jean-Y ves discussed the retail battle for sales/m2 and discount competition from Aldi and Costco.
With pressure to continue to achieve strong profit figures, risk of new discounter entrants in an
environment where there was little differentiation between Coles and Woolworths’ stores.
Jean-Yves expressed the opinion that suppliers could ‘win’ in the market due to the importance
of shopper loyalty to brands, and that their brands should be relevant and unique to shoppers as
a result.
Tony Davis
Director, Quantium
Tony provided delegates a reality check that their best customers don’t tell
you what they want… they simply switch to your competitor. He flagged work
undertaken by Walmart and Tesco to integrate consumer insight through to
sales activation by identifying the most resonant forms of media and
determining how these could best be employed to influence shoppers.
Tony then described work undertaken with local retailer Woolworths, to utilise
loyalty program data to better understand their shoppers and develop appropriate approaches to
engagement tailored to wants and needs. In addition to loyalty program data, Tony highlighted
other data streams such as financial data and insight drawn from media data allowing for
targeting advertising campaigns to the programs most watched by target consumers.
Jennifer Lai
Manager, Information Interaction & Visualization, Melbourne Lab
IBM Research
Jennifer considered ways in which retailers are switching focus from
efficiency to driving customer loyalty, and from cost to growth. At the
forefront of strategy development was Big Data, whose key parameters in
Jennifer’s view included the ‘four Vs’ - Velocity, Volume, Variety and Veracity.
Jennifer described the importance of using social media to engage
customer and create brand awareness. This is created by bringing the
stores to the internet and the internet to the stores. Connecting ‘social buzz’
by listening to consumers and capitalising on what is learned to build trust and relationships.
Finally Jennifer noted the opportunity to target consumers intelligently by adjusting marketing
messages and channel approaches.
Darren Fitzgerald
Head of Customer Service & Customer Facing Supply Chain - Oceania
Nestle Australia Ltd
Darren expressed the view that on-shelf availability (OSA) is about trust,
collaboration and a focus on the consumer, and that the prize for getting
these factors right was increased sales for retailers and suppliers alike. Darren
described a global program implemented by Nestle to improve OSA, including
measurement processes and specific pilot programs in the United Kingdom.
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Key initiatives included improvements to packaging, shelf edge label accuracy and planogram
tailoring. Alerts processes for out of stocks are also an important aspect of the program, including
the use of crowd sourcing, CCTV cameras and shelf edge monitoring technology (and who could
forget the shelfie!) Darren’s recipe for improving OSA included a genuine commitment to the cause,
the need to prioritise actions and the requirement to engage all parties in the collaborative effort.
On-Shelf Availability Panel
The OSA Panel included John Mullins (Foodstuffs), Ron Volpe (Coles) and Steve Longley
(Woolworths) and was facilitated by Patrick Medley (Kedleton and Co). To commence, each
retailer provided a short overview of what product availability meant to their business and some of
their key initiatives aimed at driving improved OSA.
The panellists then took questions from Patrick and delegates, covering a wide variety of topics
including:
Winning in Summer / Winning in January action plans
Crowd sourced OSA management opportunities
Utilising weather patterns in predicting supply and demand planning needs
Consumer demands in an omni-channel environment
Michele Levine
CEO, Roy Morgan Research
FRIDAY 24 OCTOBER 2014
Michele advised delegates that business confidence in the economic outlook
was weak with low expectations of increasing employment or investment in
2015. Conversely, consumer confidence was slightly positive, although Michele
noted concerns relating to unemployment, particularly amongst younger
Australians, as well as broader economic issues.
Michele then provided a snapshot of current and emerging demographics within
Australia. She touched on social/progressive outlook, the growing and aging population, women in
the workforce, the rise of the Asian population base, and utilisation of the internet and related
technology. Michele described how Roy Morgan segment the population utilising their ‘Helix
Persona’s’ program and how marketeers utilise this information.
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Ben Gilbert
Director Australian Retail, UBS
Ben highlighted the evolving battle in grocery, a market characterised by low
growth and an increased percentage of goods purchased on promotion,
noting that these factors were contributing to low inflation. Ben described
how retailer EBIT is rising whilst suppliers are seeing EBIT steady to falling. The
Australian retailers enjoy a larger share of industry profit compared to global
counterparts – and trending higher.
Ben flagged the impact Aldi and Costco were having in the market with the major retailers
dropping prices in reaction to the discounters. Metcash faced cost to serve challenges. Ben’s
outlook saw prices being driven even lower, ranges being reduced, aggressive cost reduction by
retailers and the challenge to drive loyalty among consumers in the face of the continued rise of
discounter market share.
Antoinette Ienco
Director, Consumer Products Retail & Distribution Team
Capgemini
Antoinette told delegates that the industry today is in an era of disruption
across both commercial and supply chain functions. Digital shopping means
that consumers have more product and price information available to them
than previously. As a result consumers are showing less brand loyalty, with all
products now being of a strong quality (including private label) and price
becoming a critical factor.
Antoinette noted that this new era is adding complexity to the supply chain through the growth of
home delivery and that supply chains were reacting to new modes including shared services, selling
direct to consumers, and implementing reduced lead times. Finally Antoinette considered the next
generation of supply chains and highlighted the benefits which can flow to companies who can
implement the right strategies.
Kosta Conomos
Executive Director, Retail Industry Group
Nielsen
Kosta examined the issues weighing on the minds of consumers, including
concerns relating to unemployment, the cost of living such as utility bill
increases, broad economic issues, household debt and rises in food prices.
These issues were exacerbating the ‘haves and have nots’ division within
Australia, which impacts the retail sector in relation to the growth of discounters
and difficulties for the convenience sub-sector.
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Kosta described challenges lying head for suppliers, including margin maintenance, difficulties in
achieving price increases, trading terms pressure, cost to serve issues and the rise of private label
product sales. These factors have ramifications for suppliers’ capability to invest in innovation. Kosta
the provided Nielsen’s top 5 trends for 2015, including moves towards freshness and wellness, focus
on the individual in retailing, managing the rich/poor divide, the struggle for loyalty among
shoppers and the role of innovation.
Tim Clover
Director, Engagement Innovation
Tim discussed the end to end value chain through the mobile consumer
connection. He highlighted the rise in advertising on mobile devices and the risk
of ‘drowning in data’ which follows all digital transactions. The modern
company’s quest is to facilitate meaningful decisions and strategies based on
retail data, brand data, and consumer data, but at the same time manage
issues such as cost pressures, reduced innovation spend, and reduces analyst
resources.
Tim’s advice was that “sharing data better will be the key to stronger categories”.
For retailers this will include point-of-sale, loyalty program and credit card data. For suppliers data
will be at an aggregated level. As such it will be important for retailers to share data with suppliers
as the end consumer spends more time with brands than with stores. Tim then provided an
overview of ‘Glow’ his company’s mobile app which provides a means for consumers to provide
instant feedback to suppliers and retailers.
Jessica Richmond
Head of Digital Marketing, Marketing Communications, Coles
2012 Joe Berry Australian Retail Industry Executive Award Recipient
Jessica spoke of how consumers are overloaded by choice, yet have limited
time available and how retailers were connecting with their consumer base
with varying levels of success and skill. Jessica provided examples of great
performance in consumer connection both overseas and within Coles.
Initiatives included tailored Flybuys offers, and utilising taste.com.au meals
solutions website.
Jessica highlighted the importance of retailers using mobile apps which add value to their customers
through assisting them to purchase with information and advice rather than simply selling products to
them. Additionally retailers can assist customers though provision of customer friendly initiatives such
as click and collect offerings and ‘the endless aisle’ expanding the range of products on offer to
shoppers. In conclusion, Jessica reminded delegates that traditional ‘bricks and mortar’ stores
provide opportunities for great theatre and consumer experiences.
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Dan Gregory
CEO, The Impossible Institute
Dan provided an entertaining and informative view of ‘survival in the
reputation economy’. We are living in a time of unprecedented change
driven by the digital revolution. This was, however, a ‘double edged sword’
as access to all communications and actions on-line become possible. In
this environ-ment Dan saw information ‘curation’ as being the power base
as it allows consumers to cut through data overload.
Dan noted that consumer expectations continue to rise, which means it is far easier to disappoint
and frustrate people - now they can tell everyone else about it too! Dan’s advice to businesses was
to create a compelling identity which represents the identity consumers are trying to project of
themselves, otherwise businesses risk becoming irrelevant to the consumer. “To be successful, we
need to move from ‘what’s in it for me’, to ‘what’s in it for them’’ Dan told delegates, noting that
shared approaches to problem solving was critical to success.
ECRA Reports Launched at Convention
Display Pallet Toolkit
The Display Pallets Toolkit, developed by an industry working group,
provides guidance to businesses considering the use of display
pallets for off-location and aisle end applications.
The move to display pallets is not a standalone best practice and
it can impact numerous elements of the supply chain. If not
implemented with due consideration to these impacts it has the
potential to increase costs and reduce efficiencies.
ECRA has been pivotal in delivering aligned positioning between major
retail organisations, which in itself will not mitigate costs and complexity
but should assist suppliers in avoiding costly duplication of effort.
The Toolkit provides the basis for industry standards and should be
supplemented by trading partner discussions and product/category considerations.
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Op erational B2B Roadmap
ECRA’s Order to Receipt Excellence Working Group, consisting experts
from major retailers, FMCG suppliers and GS1 Australia, have released a
new guidance document for industry focussed on broadening the use of
the operational aspects of B2B E-Commerce.
The Operational B2B Roadmap is intended to be a ‘common language’
catalyst and thought starter aimed at focussing attention on the broader
use of B2B E-commerce capabilities beyond the Supplier – Major Retailer
interface. Specifically the roadmap explores the use of SSCC Labels and
Advance Shipping Notices (ASNs) into areas of opportunity such as internal
stock transactions; ‘upstream’ suppliers of raw and packaging materials;
and with smaller trading partners such as (i.e. non-Major) retailers,
distributors and wholesalers.
The Roadmap document also provides links to technical advice, tools and resource guides where
more detailed information is provided.
Visit www.ecraustralsia.org.au to download reports.
The Board of ECRA thanks all sponsors and delegates who supported the 2014 ECRA
Convention and look forward to joining together again at the 2015 ECRA Convention.
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